Mobile gaming revenue to grow 50% in 2007

MUMBAI: As consumer awareness grows and publishers release more content, worldwide mobile gaming end-user revenue will grow from $2.9 billion in 2006 to $9.6 billion in 2011, according to Gartner, Inc.

Worldwide mobile gaming revenue is on pace to total $4.3 billion in 2007, a 49.9 per cent increase from 2006.

“Given the ubiquity of mobile phones in many markets and the ease of game-play, mobile gaming is expected to reach more of the global population than has been the case for traditional PC and console gaming. This will catapult mobile gaming revenue beyond that from mobile TV and adult content, but we still expect it to lag behind mobile music, since music is a more familiar form of entertainment,” said Gartner senior research analyst Tuong Huy Nguyen.

For this forecast, Gartner defined mobile gaming as video games on mobile phones. This includes preloaded software on mobile hone, games downloaded for use offline, as well as games requiring access to online resources and those purchased on removable media, such as flash memory cards. The revenue figures do not include demos and preloaded and prebundled games because there is no direct consumer revenue component to these.

More operators have opened up their billing systems during the past couple of years, giving content providers the opportunity to sell products off-deck (selling directly to the consumer). While this process has been gradual, even traditionally reluctant operators are starting to participate and provide more off-deck content as they recognize the growing benefits.

As operators relax their control over networks, publishers have taken the opportunity to take a more active role in marketing mobile games, capitalizing on their expertise to maximize distribution and education about available content. Publishers have made use of operating partners’ subscriber bases in conjunction with their own understanding of the mobile gaming market to increase sales more effectively.

Regional differences will play a significant role in adoption rates for mobile gaming. For example, even though prices for mobile games are often higher than other forms of mobile entertainment, such as music, ring tones and some adult content, mobile gaming will often be the only choice in many emerging markets because less money is needed to start mobile gaming than is required to buy a PC or games console.

Mobile gaming revenue in Asia/Pacific and Japan is forecast to surpass $1.8 billion in 2007, and reach $4.6 billion in 2011. The high revenue correlates with higher data consumption in countries such as South Korea and Japan and reflects the bigger appetite for mobile gaming in this region.

“One of the things driving mobile gaming in developed markets is the availability of faster processors in mobile devices, which enable faster response times, 3-D graphics and advanced sound capabilities, as well as less-expensive and bigger storage capabilities for memory-intensive games. At the same time, simple stripped-down games that capitalize on location-awareness and personal interaction are interesting for aficionados,” said Gartner research director Nick Ingelbrecht.

“In game-hungry markets like Australia, we estimate that approximately 10 per cent of mobile Internet users are regular gamers (comprising an enthusiastic subset of cellular users). This percentage will grow as advanced device functionality spreads through the product tiers to support a richer gaming experience,” Ingelbrecht said.

In Western Europe, mobile gaming end user revenue is projected to grow from $1.5 billion in 2007 to $2 billion in 2011. In Gartner’s most recent survey among Western European consumers, 10 per cent of those surveyed said they had used mobile online gaming and had downloaded games at least once a month. However, only 2 per cent of their mobile data service spending was on gaming.

There are differences in the types of games that sell well in Europe. Germans downloaded more strategy and quiz games, whereas the British were more interested in sports and puzzle games. Fourth-fifths of people who downloaded games in Europe prefer to do so from their operator ‘s portal. Operators faced competition from off-portal entrants in 2002, but since 2004, more users have returned to downloading games from their own operator’s portal.

“Even though customers are increasingly coming back to operators’ portals, operators themselves do not have mobile gaming as their first priority. For them, mobile TV and mobile music have taken center stage,” said Gartner senior research analyst Jessica Ekholm.

In North America, mobile gaming end user revenue is forecast to reach $716.9 million in 2007 and reach $1.7 billion in 2011. This region has been slower to adopt mobile gaming than many had hoped. Gartner analysts said part of the reason is slower adoption of wireless technologies. At the end of 2006, data revenue accounted for less than 13 percent of total mobile telecom service revenue Ã¢â‚¬â€ one of the lowest proportions among developed nations.

“Network speeds and 3G deployments have also had an impact on mobile gaming update and data adoption in general. 2.5G data rates have made downloading, and especially browsing, tedious, deterring significant adoption of mobile games,” Nguyen said.